The wave of "A+H" listings is surging, and CATL plans to secondary list in Hong Kong.

On December 26, Contemporary Amperex Technology Co., Limited (CATL) (300750.SZ) released an announcement stating that, to further advance the company’s global strategy and layout, build an international capital operations platform, and enhance overall competitiveness, the company plans to issue overseas listed foreign shares (H shares) and apply for listing on the Main Board of the Hong Kong Stock Exchange.

CATL disclosed that on December 26, it held its first meeting of the fourth session of the board of directors and its first meeting of the fourth session of the board of supervisors, which approved the relevant proposals for the company to issue H shares and list on the Hong Kong Exchanges and Clearing Limited.

The proposal states that the number of H shares to be issued in this offering will not exceed 5% of the company’s total share capital after this offering (before the exercise of the over-allotment option), and the overall coordinator will be granted an over-allotment option of no more than 15% of the H shares amount of the foregoing issuance.

Regarding the timing for the Hong Kong listing, CATL said it will fully consider the interests of existing shareholders and the situation of capital markets both in the PRC and abroad, and within the validity period of the shareholders’ meeting resolutions (i.e., 18 months from the date the proposal is approved by the company’s shareholders’ meeting, or other period agreed to be extended) choose an appropriate time and issuance window to complete this offering and listing.

Also, according to the announcement, this offering and listing still needs to be submitted to a shareholders’ meeting for approval, and approvals from relevant authorities such as the China Securities Regulatory Commission (CSRC), the Hong Kong Stock Exchange, and the Securities and Futures Commission of Hong Kong are required. Specific details of the issuance have not yet been finalized, and there are major uncertainties as to whether the offering can be successfully approved and filed.

Latest financial data show that in the first three quarters of 2024, CATL achieved operating revenue of RMB 259.04B, down 12.09% year over year; attributable net profit was RMB 36B, up 15.59% year over year; and net cash flow from operating activities was RMB 67.44B, up 28.09% year over year.

It is worth noting that this year, the “A+H” listing momentum has been heating up. Several industry leading companies, including Junda Shares, Chifeng Gold, MicroBio, Jiangbo Long, and Henrui Medicine, have been planning to list on the Hong Kong Stock Exchange. Meanwhile, leading enterprises such as Midea Group, SF Holding, and Longpan Technology have already successfully listed their shares in Hong Kong.

Considering the goals of A-share companies pursuing “A+H” listings, most point to considerations of global development. For example, about 45% of the fundraising proceeds from SF Holding’s Hong Kong IPO are used to strengthen the company’s international and cross-border logistics capabilities.

In an announcement disclosed on June 8, Chifeng Gold said that listing in Hong Kong is to meet the needs of the company’s business development, further enhance corporate governance and core competitiveness, and deeply advance the company’s global strategy.

Domestic pharmaceutical leader Henrui Medicine said in an announcement that its plan to list in Hong Kong is mainly to further advance its “dual-engine” strategy of technological innovation and internationalization, and to further support the development of the company’s international business.

In addition to companies’ own financing needs, policy support may also increase A-share companies’ willingness to list in Hong Kong. On December 19, the Hong Kong Exchanges and Clearing Limited issued a consultation paper on optimizing IPO pricing in the public offering market and public market rules, which includes a proposed reduction of the minimum number of H shares required for A+H share issuers to list their shares in Hong Kong.

“Hong Kong listing by A-share companies in 2025 may be set to heat up.” In a research report, Huachuang Securities said that lowering the threshold is expected to increase potential issuers’ willingness to list in Hong Kong. In addition, regarding companies’ own needs, driven by demand for global business expansion, listing in Hong Kong attracts international capital and helps expand their businesses.

Editor/Lu Lu Li